OnionTerror Posted February 23, 2012 Posted February 23, 2012 Just where to start... http://www.dailymail.co.uk/femail/article-2105011/Stuck-rent-trap-How-middle-class-family-kept-remortgaging-home-pay-bills-longer-afford-repayments.html There’s a house we drive past every day on the way to school. It’s a solid Edwardian home on three floors with a slightly imposing presence and bags of kerb appeal. A large hedge and trees shield it from view but this doesn’t stop the children from urging me to slow down so they can get a proper look. I, on the other hand, stare fixedly ahead. It’s not that I don’t appreciate the double-fronted windows and the lovely Camellia bush framing the porch. But the truth is, I am beside myself with envy. Three years ago this was our family home. We all remember how it felt to live there and it still seems like a cruel joke that someone else’s car is parked in the drive. And why did they have to paint the front door that horrible colour? You might ask why, if I love this house so much, isn’t it still mine? I ask myself the same question every day. But the 2008 property crash happened. And through a combination of bad financial planning and events beyond our control we were forced to sell. Now, it seems we shall never own another home again. Like thousands of families in Britain we spent years climbing the property ladder when times were good, only to find ourselves — in the recent tough climate — sliding spectacularly to the bottom with a resounding thud. Today we are living in rented accommodation. After two decades of slogging to buy a house, maintain it and give our children security for the future, we now find ourselves, in our early 40s, paying a private landlord £2,000 a month which leaves us with a big fat zero in our bank account. Yet figures out this week show we’re not alone. According to research released by the Department of Communities and Local Government, only 66 per cent of English people now own their home — the lowest percentage since Margaret Thatcher was in power 25 years ago. The survey also revealed that one in three live in rented accommodation — the biggest share of the population since 1988, when the movement towards owner-occupation was at its height. How we have ended up in this position is one thing. How we are going to get out of it is another. And it’s a dilemma which keeps me awake churning over our finances, wondering what went so wrong. Certainly, we overstretched ourselves when we bought our lovely period home for £419,000 in 2002. But with mortgage companies practically throwing loans at us in a rising property market, we slept soundly at night, smug in the knowledge the house was making us money. We’d bought it from an elderly couple who had lived there for 30 years, raising their own family within its solid walls. Even though the house badly needed modernisation (there was, for instance, no kitchen sink and the plumbing was ancient) we fell in love with the colonial-style verandah running along the back which in May would be canopied by the most glorious wisteria. Heavily pregnant at the time, I wandered dreamily through the vast, airy rooms imagining my children growing up here. In truth, I imagined us growing old there too. Besides, with the crisis in the UK pensions industry in full swing it made sense to put everything we owned into a house. But over the next seven years we steadily, and stupidly, stretched ourselves too far. It started with the thousands of pounds we spent renovating. When we ran out of money we didn’t worry — we just remortgaged. The valuer had barely been in the house for five minutes yet we were able to borrow a further £80,000. Looking back I don’t think we fully appreciated what we had. We were lulled into a false sense of security about our wealth. Whenever we overspent we just remortgaged without comprehending the consequences of taking yet more equity out of the property. In our defence, we weren’t spending the money on expensive designer clothes, luxurious holidays or flash cars. Much of it was going on school fees and upkeep of the house. By the beginning of 2008 we had remortgaged three times, taking out a staggering £500,000 loan on a house that wasn’t worth much more. Our interest-only mortgage payments had soared to nearly £3,000 a month. Which would have been just about palatable if the market hadn’t crashed. Now we were faced with the fear of living in a home we could no longer afford that would probably plummet in value. So, just before Christmas that year, we made the heartbreaking decision to put our home up for sale. Deep down we hoped nobody would bite. But when another family fell in love with the house, as we had, we knew we weren’t in a position to turn them down. What we couldn’t have predicted is how events would unfold next. We didn’t have much equity but we were still confident we’d be able to buy another house. Not having a hefty deposit had never stopped us before. But mortgages suddenly dried up overnight and lending shut down. Even more infuriatingly, interest rates were slashed and we calculated — with grim faces — that if we hadn’t sold, our monthly mortgage repayments would be a fraction of the rent we were now being forced to pay. It’s a trap many like us have fallen into and one, according to experts, which will continue to shut millions of families out of the property market for some time to come. ‘It’s a totally dysfunctional situation,’ believes David Orr, chief executive of the National Housing Federation. ‘Home ownership is increasingly becoming the preserve of the wealthy. And for the millions locked out of the property market the options are becoming increasingly limited as demand sends rents rising.’ Of course, there are many people worse off than us. We do, at least, have a roof over our heads and the upside of renting is that, when it leaks, somebody else pays to fix it. But the stark reality is that we are also stuck with no hope of getting even a big toe back on the rung of that property ladder. For a family with four children (Flo, 13, Annie, 11, Monty, nine, and two-year-old Dolly) living in the South-East it’s a minimum £450,000 for a four-bedroom house (we need five but I don’t want to sound fussy). Most mortgage companies won’t consider lending unless you have a deposit of 20 per cent and even then the rate isn’t that good. This, in case you haven’t figured it out, is a whopping £90,000 on a £450,000 house. With no savings and monthly outgoings that would make your eyes water, we don’t stand a hope of putting this sum aside — even if I shop in Aldi for ten years and buy our clothes from a charity shop. And what I could never have known is how soul-destroying it is to raise children in a house that is not your own. Sometimes it feels like we are guests in the one place we should feel ourselves. So when Dolly draws on the wall with crayon or Monty spills juice on the carpet I know at the end of our lease these normal spots of family life will be totted up as wear and tear and added to our bill. I miss marking the children’s heights on a wall, to look back on in years to come. And, last year, we couldn’t bury our beloved Labrador in the garden when he died. I’m pretty sure that digging graves for family pets is not permitted in the tenancy agreement. Perhaps, fundamentally, neither my husband Keith nor I imagined how it would feel — at this time in our lives — to be back at square one with nothing to our name, just like when we met in our early 20s. It’s easy to argue a house is just bricks and mortar. But it’s a home I desperately miss. A home we can all call our own.
Debbie568 Posted February 23, 2012 Posted February 23, 2012 That's quite poignant. Renting does have its silver lining. I now rent a better place than I used to own. I prefer inner city living to being way out in the wop wops. And it would have to be a seriously special house for me to want to tie up £90k deposit in it. But on the other hand, I am also not spending £500 a week on rent, or anything like what it would cost to buy the place I presently rent.
RufflesTheGuineaPig Posted February 23, 2012 Posted February 23, 2012 Almost feel like reposting my aircraft hanger story. But I want to update it first with suggestions from people on here.
gf3 Posted February 23, 2012 Posted February 23, 2012 How can people intelligent enough to earn big salary's be so stupid? complaining they can't save the £90,000 for the deposit on the one hand but borrowing an extra £80,000 just after they moved in.
Venger Posted February 23, 2012 Posted February 23, 2012 She's a younger wannabee Liz Jones type columnist. I'm not sure her story is true. If it is, then they deserve to end up with no money left to even buy a smaller home, after selling the fine home they bought in 2002 which they'd mewed for tens or hundreds of thousands of pounds. Whenever we overspent we just remortgaged without comprehending the consequences of taking yet more equity out of the property. Let's face it, LJ is already facing competition as The Mail's most annoying writer. The younger models are coming up thick and fast behind her - hows about the truly horrendous Shona Sibary? Digital Spy Forums, Feb 2011.
Saberu Posted February 23, 2012 Posted February 23, 2012 The Candy brothers built their empire starting with a 15,000 pounds loan from their grandmother. That a couple could waste half a million from MEW shows they have no appreciation as to the value of money. I'm pretty sure I can build a successful business from as little as 1000 pounds so for them to waste 500,000 I have no sympathy. It seems the wealthier they thought they were the more they wanted to spend. I'm the opposite, the more I earn the less I want to spend because if I earn more it feels worth the effort to save. That's why I have a lot of sympathy for people earning minimum wage not wanting to save money, without being able to reward themselves by spending some of their earnings they will likely feel like slaves and saving a small amount like 100-200 pounds/ month would probably feel pointless considering most house prices are over 100k.
ticket2ride Posted February 23, 2012 Posted February 23, 2012 Their 2k rent leaves them with a big fat zero left but 3k i/o mortgage was just about affordable? I think i've located the source of the problem. :roll eyes:
winkie Posted February 23, 2012 Posted February 23, 2012 How can people intelligent enough to earn big salary's be so stupid? complaining they can't save the £90,000 for the deposit on the one hand but borrowing an extra £80,000 just after they moved in. ...instant gratification, self delusional, failure to live within their means.......one thing you can't accuse them of is not living in the moment....only problem being that moment passes.
Pent Up Posted February 23, 2012 Posted February 23, 2012 I love this kind of feel good story in the morning
winkie Posted February 23, 2012 Posted February 23, 2012 It’s easy to argue a house is just bricks and mortar. But it’s a home I desperately miss. A home we can all call our own. ...is there a doctor in the house?
crash2006 Posted February 23, 2012 Posted February 23, 2012 go bankrupt or borrow more and leave the country..
hedgefunded Posted February 23, 2012 Posted February 23, 2012 She's got "Mumsnet" written all over her.
Bloo Loo Posted February 23, 2012 Posted February 23, 2012 "After two decades of slogging to buy a house, maintain it and give our children security for the future, we now find ourselves, in our early 40s, paying a private landlord £2,000 a month which leaves us with a big fat zero in our bank account." They should have virtually paid it off by then. No, I guess they MEWED just a little bit. And in this one sentence we have: Yes, only the lazy and those that make no sacrifice cant buy a house, they were getting on with their lives, and renting is dead money.
interestrateripoff Posted February 23, 2012 Posted February 23, 2012 Their 2k rent leaves them with a big fat zero left but 3k i/o mortgage was just about affordable? I think i've located the source of the problem. :roll eyes: I loved that bit of financial genius.
scrappycocco Posted February 23, 2012 Posted February 23, 2012 attendants of the ******** and brown school of economics......
JustAnotherProle Posted February 23, 2012 Posted February 23, 2012 Lets do the property sob story checklist: * Gleeful and gloating hand-wringing over a sprawling house that only the very wealthy could possibly afford - check * Underhanded assertions that "renting is bad" - check * Statistics used in a way to make out that a fall to a more realistic level of home ownership is bad - check * Reinforcement of the false memes "house prices always rise" , "the house is our pension", " your house is a magical ATM" etc etc - check * Willful shedding of their own moral and financial responsibility onto the money lenders. - check * Multiple kids " who must have a private eduation daaaarling" - check * Desire to live a lifestyle that has destroyed them financially but are *still* hungry for more! - check * Pitiful heartstrings tug about the plight of the poor children now mummy and daddy have been forced to slum it and rent with a dead pet thrown in for good measure. - check * The article leaves normal thinking people with an over all sense of idiocy that only those so bereft of self awareness about how stupid they truly are can produce, yet who are delighted to display this in a national newspaper masquerading incorrectly as a story of plight that they seem to think everyone can relate to. - check
The Knimbies who say No Posted February 23, 2012 Posted February 23, 2012 Beyond parody. Previously hadn't come across this columnist before. A browse of her other articles would suggest that 'she ain't the sharpest tool in the box, but she is the biggest'. Previous article has her wringing her hands over whether she is a good parent for being a pushover. Her management of financial affairs don't seem to count as part of parenting skills.
buyinbrazil Posted February 23, 2012 Posted February 23, 2012 just anotherprole...that checklist made me chortle!!!!!!!!!
Austin Allegro Posted February 23, 2012 Posted February 23, 2012 Lets do the property sob story checklist: * Gleeful and gloating hand-wringing over a sprawling house that only the very wealthy could possibly afford - check * Underhanded assertions that "renting is bad" - check * Statistics used in a way to make out that a fall to a more realistic level of home ownership is bad - check * Reinforcement of the false memes "house prices always rise" , "the house is our pension", " your house is a magical ATM" etc etc - check * Willful shedding of their own moral and financial responsibility onto the money lenders. - check * Multiple kids " who must have a private eduation daaaarling" - check * Desire to live a lifestyle that has destroyed them financially but are *still* hungry for more! - check * Pitiful heartstrings tug about the plight of the poor children now mummy and daddy have been forced to slum it and rent with a dead pet thrown in for good measure. - check * The article leaves normal thinking people with an over all sense of idiocy that only those so bereft of self awareness about how stupid they truly are can produce, yet who are delighted to display this in a national newspaper masquerading incorrectly as a story of plight that they seem to think everyone can relate to. - check Brilliant! You forgot though the aspirational details of saddling their children with daft names 'Dolly'??? FFS and a labrador. I'd love to see in her contract where it says she can't bury a dog in the garden. I doubt if even the most fusspot BTL 'it's my home, not yours' landlord has thought of that one.
browneconomy Posted February 23, 2012 Posted February 23, 2012 I laugh about the use of the label 'middle class' to evoke sympathy. - If she were a working class cleaner being kicked out of her house 'cos her husband lost his job of 20 years for the 'Wail' there would be no story. I know class is about education, upbringing and aspirations but if the woman 'hasn't got a pot to p155 in' ? There has long been the notion that you can 'buy' class (Kate Middleton's lot ) but the difference being they (Middletons) 'bought' their class with money. Shona Sibary honestly believed she could buy 'class' with debt. The tragedy being she's not alone in her delusion.
shrike Posted February 23, 2012 Posted February 23, 2012 I was thinking as I read the first few paragraphs "I wonder if they were sending the kids to private school?" - and lo! they were. I cant believe the state schools in leafy Hampshire are some sort of crack riddled gangsta haven - it was the same with the Daily Wail sob story the other week with the family who lost their 'mansion' - it was in rural Devon but obviously the kids couldn't go to the local school
19 year mortgage 8itch Posted February 23, 2012 Posted February 23, 2012 Wind the clock back to 2002 and it would be all, 'look how clever we are', 'look at our house' 'we've worked hard climbing the property ladder', ' can't go wrong with bricks and mortar' ; when the reality is they are all fur coat and no knickers. All she sees in the mistake in selling when she did. Otherwise she "knows" her variable rate IO tracker was the right thing to do. Give her half a chance and she'd buy with exactly the same strategy tomorrow. Everyone needs a moral hazard so they start thinking about what they do, before they do it.
Dorkins Posted February 23, 2012 Posted February 23, 2012 So she sold this house in 2008 for somewhere in the region of £500-600k? Not sure I envy the new owners, that's a lot of debt to clear.
Quicken Posted February 23, 2012 Posted February 23, 2012 Tonight I'll sing my songs again I'll play the game and pretend But all my words come back to me in shades of mediocrity Like emptiness in harmony, I need someone to comfort me Homeward bound I wish I was Homeward bound Mew, where my smugness led me Mew, where I blew my equity Mew, where my debt lies waiting silently for me
19 year mortgage 8itch Posted February 23, 2012 Posted February 23, 2012 Well, everyone's learnt now that one must never sell if one thinks we are going into recession/financial crisis. That is their main regret - they looked at the experience of the previous housing crash and they didn't want to get caught out. The government will save us all. And if they don't, we won't vote for them. Easy. I keep pushing for an answer but there isn't one. As you guys are alluding to, there's only you, me and everyone else.
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